Every year, a thick document is released that most Indians never read. It is popularly known as \u201cBudget\u201d. That document reflects the decisions, the decisions about what a state will build, and what it values.<\/p>\n\n\n\n
In the year 2024-25, the Government of Maharashtra made a choice. The \u201cMukhyamantri Majhi Ladki Bahin Yojana\u201d which gave the women \u20b91,500 each month. This scheme was allotted a total of \u20b936,000 crores. For context, India’s space agency ISRO, which sent Chandrayaan to the moon and Mangalyaan to Mars, operates on an annual budget of approximately \u20b913,000 crores. So yeah, an electoral promise costs more than the annual budget of India\u2019s Space program!<\/p>\n\n\n\n
This is not about whether women deserve support. They do. But support means skill training, childcare centers, healthcare access, not on short-term dependency.<\/p>\n\n\n\n
Every economics student learns a basic difference just in the beginning, that is, revenue expenditure versus capital expenditure. Revenue spending pays for things consumed immediately. The salaries, subsidies, pensions, etc. Capital spending builds assets that generate value for years, such as roads, hospitals, research centers, power plants.<\/p>\n\n\n\n
The difference matters because resources are finite. A rupee spent on subsidizing electricity today is a rupee not spent on building the infrastructure that creates jobs tomorrow. And when the states borrow just to meet the revenue expense and not for capex, that\u2019s when they are borrowing from the future to survive the present.<\/p>\n\n\n\n
Start with the oldest trick in politics, free electricity. Across states, power subsidies for households and farms dominate the share of the budget. Many states allocate thousands of crores annually to provide free or cheap electricity. These are not one-time expenditures. They occur every single year, creating a permanent claim on state revenues.<\/p>\n\n\n\n
The political logic is clear. Free electricity wins votes as farmers depend on subsidized power for irrigation and urban households appreciate lower bills. But this has a hidden cost that no one bothers about. To keep these subsidies going, the state borrows funds for such revenue expenditure, and avoids real growth through Capital expenditure. When states borrow<\/p>\n\n\n\n
\u20b910,000 crores and the majority goes toward salaries and subsidies instead of building assets, the debt compounds without generating corresponding economic returns.<\/p>\n\n\n\n
Even the Green transition takes a hit. When grid power is free, the economic case for rooftop solar collapses. Why would a household invest lakhs in solar panels when electricity costs nothing? Why would a farmer buy energy-efficient pumps when power is subsidized? States with heavy power subsidies see slower adoption of renewable energy, not because citizens oppose sustainability, but because the economics work against it. Meanwhile, other countries build renewable energy manufacturing ecosystems that employ millions.<\/p>\n\n\n\n
But then why do these subsidies still exist? Well, because they are the weapons used to fight in the elections. And when a leader tries to abolish these, he is left out of the battlefield. The consequence? A locked-in system where short-term electoral promises override long-term fiscal sustainability.<\/p>\n\n\n\n
Then came the next layer, direct cash transfers. First Karnataka Government launched a scheme. Then Maharashtra stepped into the game, then Delhi launched it and very soon, the Punjab government announced the same thing. Every government gives away money to women, somewhere the amount is \u20b91,500, the other place it is \u20b92,000. Some other government will promise maybe more than that and it works everywhere. For rural and economically vulnerable voters, they feel that the government is understanding their pain. In reality, they are just handing out painkillers that also kill the developmental plans which could have provided \u20b915,000 per month job to their own children. It doesn\u2019t build a hospital that saves their life, it just comes into their bank account every month.<\/p>\n\n\n\n
And what scenario turns out to be on the Balance sheet? The debt keeps rising. Punjab’s debt-to-GSDP ratio hovers over 45%, one of the highest in India. When debt servicing eats 25% of revenues and subsidies consume another 25-30%, that leaves barely 45% for everything else: police, courts, schools, roads, healthcare, disaster response. That’s not governance. It’s a path to decline.<\/p>\n\n\n\n
And again, the infrastructure that could have been built, the highways that could have been longer and the education quality that could have been a bit better, all of that takes a back seat.<\/p>\n\n\n\n
There is a generational dimension to this. A student graduating today with an engineering or commerce degree is not competing just with peers from other countries. She is competing against her own state government’s past decisions. Decisions to prioritize consumption subsidies over the infrastructure and institutions that would have created opportunities for her.<\/p>\n\n\n\n
So what should the Youth of the country do? The answer is not outrage, it’s to seek more clarity. Clarity about what subsidies actually cost and what they displace. Clarity about the difference between policies that help people survive today versus policies that help people thrive tomorrow. Clarity about why fiscal sustainability is not an abstract economic concept but a lived reality that determines job availability, infrastructure quality, and economic mobility.<\/p>\n\n\n\n
When the next election approaches and promises multiply. More subsidies, more freebies. The question is not “Do I deserve this support?” Of course you do. The question is: “What is this displacing? What could this money have built instead? And which choice gives me a better future?”<\/p>\n\n\n\n
Can\u2019t it be this way that instead of subsidizing power consumption, we subsidize the installation of rooftop solar systems. The fiscal outlay might have similar costs, but this time we would be adding real assets on our Balance Sheet. Households gain an asset that generates power for 25 years. Installation and maintenance create jobs. Energy costs decline over time, reducing future subsidy needs. The same money, spent differently, builds capacity rather than perpetuating dependency.<\/p>\n\n\n\n
Or redirect resources toward vocational training centers, healthcare facilities, and rural connectivity. In the future, it might not give you those \u20b91,500, but it will definitely put<\/p>\n\n\n\n
\u20b915,000 in your account every month for decades once you gain employable skills.<\/p>\n\n\n\n
Indian philosophy offers a frame for this. The concept of \u090b\u0923\u093e\u0928\u0941\u092c\u0928\u094d\u0927 (\u1e5b\u1e47\u0101nubandha), the debt between generations. What we inherit from those before us, it’s our duty to pass on, preferably improved, to those who follow. The generation that built ISRO, IITs and the major dams, worked with far fewer resources than we have today. They chose to invest in institutions and infrastructure that would compound over time. We are the beneficiaries of those choices.<\/p>\n\n\n\n
Now let us not leave crumbling infrastructure because capital budgets were repeatedly sacrificed for consumption subsidies.<\/p>\n\n\n\n
This is not about blaming politicians. Politicians respond to incentives. If voters consistently reward short-term handouts over long-term investment, then politicians will also supply short-term handouts. Therefore, as citizens, it is our responsibility to make use of our educated brains and make wise decisions.<\/p>\n\n\n\n
We have to make choices about whether we prefer free power now, or the green-tech industry that could have employed millions? The budget that funds ISRO’s next mission, or the budget that sends monthly transfers until the state runs out of money?<\/p>\n\n\n\n
The future belongs to those who can see past the immediate, think in decades rather than electoral cycles, and recognize that true support builds capacity, not dependency. It just requires thinking. Thinking slowly, patiently, uncomfortably and thinking about opportunity costs, trade-offs, and what kind of country we are choosing to become.<\/p>\n\n\n\n
And that thinking begins now.<\/p>\n","protected":false},"excerpt":{"rendered":"
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